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Inside Lilly’s 2Q16 Estimates for Its Neuroscience Franchise

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Neuroscience franchise

Another franchise in Eli Lilly and Company’s (LLY) Human Pharmaceuticals segment is the neuroscience franchise. The neuroscience franchise contributes over ~13% of Lilly’s total revenues. Key drugs in this segment include Zyprexa, Cymbalta, and Strattera.

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Zyprexa

Zyprexa is an antipsychotic drug used in the treatment of brain disorders like schizophrenia and bipolar disorders. Sales from Zyprexa are expected to decrease by over 18% to $207 million in 2Q16, as compared to ~$253.7 million in 2Q15, due to lower sales in international markets and the loss of patent exclusivity in Japan for the use of Zyprexa in the treatment of schizophrenia and a negative impact of foreign exchange on international sales. Zyprexa has generic competition from Mylan (MYL) and Teva Pharmaceuticals (TEVA).

Cymbalta

Cymbalta is an antidepressant used for the treatment of depression and anxiety and at times in bone and muscle pain. Sales from Cymbalta are expected to decrease by over 27% to $199 million in 2Q16, as compared to ~$274 million in 2Q15, due to lower sales in both the US and international markets and a negative impact of foreign exchange.

Other drugs

Other drugs for the neuroscience franchise include Strattera and Prozac. Strattera, a drug for attention-deficit or hyperactivity disorder, expected to report an increase in revenues to $200 million for 2Q16, as compared to $192 million for 2Q15, following increased sales worldwide. Prozac, another antidepressant from Lilly, is expected to report nearly flat revenues for 2Q16.

Strattera competes with Shire’s (SHPG) Vyvanse and Intuniv, and Johnson & Johnson’s (JNJ) Concerta. To divest risk, investors can consider ETFs like the iShares S&P Global Healthcare ETF (IXJ), which has 1.9% of its total assets in Lilly.

In the next part, we’ll discuss the oncology franchise.

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